Despite being at the forefront of innovation in many areas, the way the Bank of England implemented monetary policy was overly complex and imprecise, admitted Paul Tucker, executive director of markets at the Bank, when he launched proposals to reform its market operations in July 2004. The Bank used to intervene in the market several times a day to regulate liquidity, but only via a small handful of counterparties, who in turn aimed to keep their overnight balance at the Bank close to zero. The